In the above figure, point E represents the level of real GDP at which planned saving equals planned investment. At point C
A) changes in inventories cannot be determined.
B) unused industrial capacity exists in the economy.
C) unplanned inventories increase.
D) unplanned inventories decrease.
C
Economics
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If prices of both horizontal and vertical goods decrease by 50%,
A) budget constraint will be unchanged. B) slope of the budget constraint will increase. C) slope of the budget constraint will decrease. D) budget constraint will shift outward in a parallel fashion.
Economics
In a two-agent and two-good economy, a competitive market equilibrium occurs when
A) the agents' indifference curves are tangent to the price line. B) the agents' marginal rate of substitution are zero. C) the excess supply exceeds the excess demand. D) the agents' indifference curves intersect the price line.
Economics